A UBS report predicts discount retailer Aldi could double Australian sales in the next five years.

Dean Lewins).: AAP

A study of the growth of discount retailer Aldi predicts it could almost double its Australian sales in the next five years.

The report by global financial services company UBS estimates Aldi currently has a turnover of $5.3 billion and could increase that to more than $9 billion by 2019.

"It's got some very well priced products, it's got good quality products, and it's something different, and I think it's really engaged the consumers in a big way and as a result it's been very successful," said report author Ben Gilbert, a retail analyst with UBS.

Mr Gilbert says Aldi currently has about 7 per cent market share on Australia's east coast and is expected to grow that to close to 10 per cent, plus open new stores in South Australia and Western Australia.

Aldi is expected to take some market share from the two major supermarkets Coles and Woolworths, but the report predicts the Metcash group, which supplies independently-owned supermarkets, would be worst affected.

"What you've seen with Aldi is a lot of their stores are actually stand-alone stores, or outside of big shopping centres, so as a result those types of stores generally impact the independents more, but obviously Coles and Woolworths will be impacted as well," Mr Gilbert said.

He says competition in the supermarket sector is increasing and that means better value for consumers.

"From a supply perspective, I think it's always good to have more people to supply to.

"What that inevitably means is you've got less reliance on one customer.

"Having more players in the market is going to be good for suppliers, more choice to sell to and more opportunities for them," Mr Gilbert said.

Competition law expert Alexandra Merrett says Aldi has already brought fundamental changes to the Australian supermarket sector, with Coles and Woolworths following Aldi's use of private label brands which now make up about 20 per cent of all grocery sales.

Ms Merrett agrees that Aldi will take more bite out of the sales of independent supermarkets than the big two retailers.

"Aldi is moving into South Australia and Western Australia where the independents are quite strong, much stronger than on the east coast," Ms Merrett said.

"So in one respect it doesn't really show Coles and Woolworths losing a lot of market share, but it does show that Aldi, with say 15 per cent of the market, I think that's probably the most optimistic outcome any time soon, will pack a lot more punch,than thousands of independents having up to 15 per cent."

And she predicts that could have benefits for producers who supply supermarkets.

"At the moment, suppliers are in a really hard spot. If they lose a supply contract, with say, Coles, they've lost access to say 40 per cent of the Australian market. That's huge.

"If you have a case where a single body is standing and representing say 15 or 20 per cent of sales, that means your bargaining position against Coles and Woolworths is a little improved.

"But you do have to remember Aldi's predominant business model is all driven by cost, so again, it's just going to be a case of the cheapest, most reliable producers will win."

Aldi refused an interview, but in a statement said it intended to open 70 to 80 stores in Western Australia in coming years and about 50 in South Australia.

The company said it expected to increase volumes as it expanded and be able to offer opportunities to local suppliers.